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April 7, 2022
Shareholder meetings are an appropriate forum for an inspirational speech or two but judging the volume of rhetoric to employ can be tricky.
Deutsche Telekom on Thursday took the ‘floodgates open’ approach. In a statement issued ahead of its AGM, CEO Tim Höttges cast his company as nothing less than “an anchor of stability” in uncertain times. The Ginsters Steak Slice might have something to say about that, but Höttges is entitled to his opinion.
“Never in my lifetime has there been so much uncertainty,” he continued. This is a significant statement when you consider that Höttges was born in Germany when construction of the Berlin Wall was underway. “What is Deutsche Telekom’s role in this world? The most important thing: The T does not waver. We are the provider to the Western World. With strong mainstays on both sides of the Atlantic. The United States and Europe.”
And until recently a budding one in Russia too. Until its invasion of Ukraine, DT was like many Western companies: comfortable with doing business in Russia. Headquartered in St Petersburg, Deutsche Telekom IT Solutions Russia also boasted offices in Moscow and Voronezh in the south. At its peak, it claimed to employ 2,000 staff. Following the invasion, Deutsche Telekom swiftly pulled the plug on the operation, and as this Data Centre Dynamics article illustrates, it went to some lengths to play down the size of its Russian presence.
DT’s country profile for its Russia arm still appears on search engines, but the links have been redirected. The Website for the Russian business claims to be under construction and advises the weary journalist to try again later. However, at the time of writing, its YouTube channel, Facebook, Instagram and LinkedIn pages were all still up. In addition to partially scrubbing its Russian presence from the Internet, Deutsche Telekom has also made an effort to help Ukrainian refugees, offering free calls and texts to their homeland, donating €1 million to the German Red Cross, and equipping refugee accommodation with free Wi-Fi.
“Global solidarity is encouraging. But solidarity alone is not enough. Actions are what count,” said Höttges.
In addition to discussing its role as a guiding, magenta-coloured light to the people of the free world, Höttges also took time to discuss the day-to-day aspects of Deutsche Telekom’s business.
For instance, the German incumbent is running ahead of schedule with its domestic FTTH rollout. Until now, it planned to pass 10 million premises by 2024, but now it expects to pass “well over 10 million.”
Meanwhile in the US, synergies from T-Mobile’s merger with Sprint are higher than expected. “Originally, we said we expected the takeover to unlock annual cost synergies of 6 billion dollars by the end,” Höttges said. “We have now raised this to 7.5 billion dollars.”
This week’s AGM follows February’s publication of a healthy set of financials for 2021. Group revenue was up 7.7 percent to €108.8 billion, while adjusted EBITDA climbed 6.9 percent to €43.2 billion. Operationally, on the domestic front, it added 1.2 million fibre customers and 360,000 broadband net additions. Its postpaid mobile customer base increased by 666,000. T-Mobile US had another good year, adding 6.7 million customers, and growing revenue by 15.2 percent year-on-year to $80.8 billion. On Thursday, Höttges reiterated the full-year dividend of €0.64 per share, up from €0.60 for 2020.
While it may be debatable whether Deutsche Telekom can pass itself off as a credible “anchor of stability” in an uncertain world, it certainly makes a strong case for being a credibly successful telco.
Nick is a freelancer who has covered the global telecoms industry for more than 15 years. Areas of expertise include operator strategies; M&As; and emerging technologies, among others. As a freelancer, Nick has contributed news and features for many well-known industry publications. Before that, he wrote daily news and regular features as deputy editor of Total Telecom. He has a first-class honours degree in journalism from the University of Westminster.
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